Biomass Boiler for a Plant Nursery Northern England

Posted On: 2 February 2015 Industry: Energy

Finance Need: Stephen owns and runs a plant nursery growing seedlings which are grown through the winter months and are supplied to the trade through the spring and summer months. The site includes five acres of glasshouses so the burning of oil for heating was a major business expense. Stephen was very much aware that although the business was stable and gross profit margins were holding up well, the ever-increasing cost of heating oil was eroding profits. Something had to be done.

 

The Situation: Stephen investigated the savings in fuel costs and RHI payments associated with acquiring a state of the art biomass boiler, the cost of which was £250,000 plus VAT. This was a significant sum of money for the business to find bearing in mind Net Profits were modest and the businesses bank facilities were already fully used during the seasons when trade was slow.

Arkle was approached to provide a competitive quotation for asset finance. Arkle’s competitor had provided a quotation for Leasing the boiler which put Stephen’s RHI payments in jeopardy as Ofgem prohibit Leasing. Stephen was pleased that Arkle had pointed this key issue out to him as the potential loss of future RHI payments would have been catastrophic.

 

What Arkle Did: Arkle provided stage payment funding for three months prior to the installation of the biomass boiler and upon commissioning the boiler converted the stage payment loan into a Hire Purchase agreement. Monthly repayments were in line with cashflow ensuring the business paid only one-third of the normal monthly payments during the traditionally quiet months from July through to February. This meant that Stephen’s cashflow was protected and there was no need to ask the bank for an increase in the overdraft facility.

Biomass Boiler

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